Could Inflation Threat Provide An Unexpected Boost To Cryptocurrency P2P Markets?

The following is a contributed article from a content partner of Benzinga

In the aftermath of last month’s market bloodbath, the outlook in stocks is beginning to appear somewhat more optimistic. The S&P 500 and Dow Jones are both up over 20% from their March lows as investors flock to grab themselves a bargain. However, according to the NYT, these investors are mostly “opportunistic fund managers.” Average retail investors, on the other hand, are preferring to wait things out.

This trend hasn’t manifested within the cryptocurrency market where Bitcoin has made an impressive recovery from its March lows.

For retail investors considering getting into the crypto markets, Oobit is now making it easier. The startup is leveraging Coinbase’s secure custodial services for a multi-featured gateway service featuring a peer-to-peer cryptocurrency marketplace and price aggregation service.

These physics are playing out in the context that the financial impact of the coronavirus pandemic is likely to be severe beyond the current fallout. And while governments around the world are pumping cash into their economies in an attempt to support individuals and businesses throughout the economic food chain, these measures now open up the looming potential for large-scale inflation.

For instance: the Australian central bank has injected $36 Billion AUD into its economy, inflation in Brazil has risen well above expected levels, and US government debt is reaching record a high. 

Rising US Government Debt - April 2019 to March 2020. Source: tradingeconomics.com

“Digital Gold”?

Periods of inflation are often when Bitcoin performs best, at least on a local level. And while the “digital gold” narrative took a big hit in March, as did virtually every asset class, the price of Bitcoin has rebounded surprisingly well to recover most of its pre-crash value.

Bitcoin’s role as a gold-like safe haven has long been speculated by those in the crypto community, although as of yet it hasn’t been tested on a global level. The speculation is driven in part by evidence of citizens in countries with traditionally volatile national currencies, such as Venezuela, Argentina, or Kenya, turning to cryptocurrencies as a safe haven for their wealth.

These trends are visible on peer-to-peer (P2P) trading platforms, which can easily drill down transactions to a country level. Perhaps due to rising costs and heightened distrust of centralized authorities, P2P trading seems to come into its own during times of economic uncertainty as users seek out trading options with fewer fees and more decentralized structures.

As a result, the current climate of uncertainty has made now as good a time as any for a new P2P player to enter the market. Oobit is launching its platform, which features a P2P marketplace but also has several other features designed to appeal to crypto users looking for ways to reduce the costs and friction involved with trading crypto. 

Hunting for the Best Price

So far in the evolution of cryptocurrency, there has been no easy way for users to compare the price of any given assets across different trading venues. Oobit aims to address this gap with its “Oobit Hunter” feature. In a similar way to Expedia, users can see the prices available from different exchanges. However, the platform also includes prices on offer from traders using the Oobit P2P marketplace.

Because the platform factors trading fees into the final costs seen on the screen, users can be sure they’re getting the best price available on the market. However, Oobit Hunter also allows users to search for the fastest trade if they prefer speed over costs.

Hunter provides other features like the ability to filter searches by criteria such as the lowest fees, location, or the number of successful trades concluded.

To complement the Hunter feature, Oobit is also introducing Oobit Pass, which offers users the opportunity to complete a know-your-customer (KYC) verification only once, after which they can access multiple exchanges without having to get verified on each one. The feature is designed to reduce friction in the crypto purchasing process by allowing users to find the best price and then simply buy their chosen asset before the price moves. 

A Well-Timed Entrance

Given Bitcoin’s current price performance relative to traditional assets, it seems that Oobit’s entrance to the market is well-timed for traders seeking to avoid any avoid potential inflation that may occur among national currencies. The platform’s accessibility could even help to boost cryptocurrency adoption, as the multiple steps involved with a crypto purchase is often a deterrent to less tech-savvy users.

Oobit’s partnership with Coinbase means that the company never actually takes custody of any users’ funds. While Oobit has developed its own platform and associated wallet, all funds are stored in Coinbase’s secure custody accounts. Once again, this is likely to appeal to newer users given that Coinbase is a well-recognized name with a long-standing reputation in the crypto space.

With new platforms like Oobit making cryptocurrency more accessible and spendable, the coronavirus fallout could have the unanticipated side effect of boosting Bitcoin adoption like never before.